Thursday, February 22, 2024

Decarbonising Public Sector Heat Networks: How to Address the Performance Gap Challenge

Chris Davis, Head of Marketing at Hysopt, explains how digital technology and the new Government Heat Network Efficiency Scheme can help organisations across the public sector decarbonise heat networks and mitigate rising energy costs.

The public sector heat challenge

Across the UK, the local authorities, NHS Trusts, universities and colleges are committing to ambitious carbon reduction targets, with decarbonisation of heat identified by many as a key challenge for the sector.

For many, heating and cooling represents more than 70% of annual energy consumption and 40-50% of energy costs and CO2 emissions.

However since the global energy cost spike in 2021, organisations are expecting their energy expenditure to double when they exit their current forward purchase agreements.

Net zero carbon

Public sector organizations must significantly reduce gas consumption and invest in low-carbon heat sources like heat pumps to meet their net-zero commitments.

However, the Public Building Energy Efficiency Report examined over 450,000 public buildings in England and Wales and found that the decarbonization pace needs to accelerate significantly. At the current rate, the decarbonisation targets won’t be achieved until 2138!

Despite progress, transitioning to low-carbon heat is challenging for public organizations that rely on natural gas as the primary heat source. This challenge is particularly evident in scenarios where large gas boilers and combined heat and power systems serve multiple buildings through heat networks, such as on university campuses or large hospital sites.

Furthermore, handling high-carbon assets like CHP and determining the efficiency of heat pumps in heating older buildings remains a concern for many organizations

Heat network Performance Gaps

Heat networks – which supply heat from a central source to heat multiple buildings connected by insulated underground pipework – form a key part of the UK’s transition to net zero emissions as they enable connection to larger-scale, renewable and recovered heat sources.

However recent research conducted by BEIS indicates that many existing heat networks operate inefficiently, leading to higher than expected energy costs, unnecessarily high carbon emissions, and generally poor thermal comfort levels in buildings.

Meanwhile, studies by Hysopt of over 400 heating installations reveal that “Performance Gaps” mean energy costs are, on average, 32% higher than they otherwise need to be, and carbon emissions 40% higher. Even in new and recently upgraded systems, significant opportunities to optimise performance are being missed.

And this is only exacerbated by the recent record increase in gas prices, leading to unnecessary and avoidable extra heating costs that can run into hundreds of thousands or even millions of pounds per year.

Using HVAC digital twins to address heat network performance gaps

Universities, NHS Trusts, and local authorities are increasingly using “HVAC system digital twin” technologies to optimise their campus heat networks. This approach simulates the entire installation in a virtual replica, enabling organizations to identify cost-effective solutions for eliminating performance gaps.

For example, the University of York created a digital twin of their heat network to identify excessive gas consumption and energy costs caused by heating distribution systems in connected buildings.

Simulations from the digital twin demonstrated how specific changes to the installation could reduce gas consumption by over 10 million kWh per year, resulting in energy cost savings of £285,000 per year at 2021 price levels.

In today’s new world energy costs, the savings would be closer to £1m per year.

Furthermore, fixing fundamental performance issues allows buildings and heat networks to operate under suitable conditions for low-carbon heat generation options like heat pumps, reducing both operational and capital investment costs.

Heat Network Efficiency Scheme (HNES)

The newly established Department for Energy Security and Net Zero aims to address performance issues in existing heat networks and connected buildings through the Heat Network Efficiency Scheme.

The £32m grant program opened for applications in February 2023 and provides funding for public, private, and third sector applicants in England and Wales, including hospitals, universities, colleges, and local authorities.

The scheme offers up to £2m in revenue grants, covering 100% of the funding for optimization studies, which HNES typically funds up to £24,000 per project. HVAC system digital twin studies align well with the requirements of HNES revenue grants.

An additional £30m is available as capital grants, providing 50% match funding for eligible intervention/improvement measures.

Further details can be found in the Heat Network Efficiency Scheme Guidance for Applicants.

In summary

Optimising and decarbonising heat networks is essential to meet carbon reduction targets, lower energy costs and improve thermal comfort levels in buildings. The HNES scheme provides an opportunity for public sector organisations to trial HVAC digital twins to identify inefficiencies and the most viable solutions for improving their heat network performance.

To learn more about this alternative approach to reducing heat network performance gaps watch the recent Hysopt webinar “Making Public Buildings Low Carbon Heat Ready

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